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Phil Talbert took the plunge and bought an electronic medical-record system for his small
medical practice in Shelby, N.C., in 2010, assuming the pricey computer program would last years,
perhaps a career.

Then a month ago, just as Talbert was getting comfortable using the system and appreciating its
potential, the physician’s assistant got a jolt: The service, called MyWay, was being discontinued.
The technology, which doesn’t work on smartphones and tablets, already is obsolete.

MyWay, in use by more than 4,000 doctors nationwide, had cost up to $30,000 per doctor to
install, or about $600 a month per physician as a subscription service.

“We bought what we bought thinking it was a stable company and it was their newest package,”
Talbert said. “You spend all this time transitioning to a program, and they come back and say, ‘
Sorry, guys, we’re not going to do this after Jan. 1.’ ”

The scenario is playing out throughout the nation at a critical time when electronic medical
records no longer are optional for doctors and their patients.

The service cancellation by Chicago-based Allscripts is thought to be the first instance of a
major vendor of electronic medical records pulling the plug on an electronic medical-record
system.

In an industry crowded with hundreds of such vendors offering more than 1,000 electronic
medical-records programs, Talbert’s situation is expected to repeat itself across the country as
bigger companies gobble up smaller ones and software programs become redundant and obsolete.

The major driver for a wholesale changeover to a new generation of electronic medical records is
the Obama administration. As part of the president’s move to cut health-care costs and improve
medical service, the federal government is offering as much as $22.5 billion in incentives for
adopting computerized patient records — up to $63,750 per doctor — and also planning to ding
doctors who don’t use electronic systems for their Medicare patients, with penalties up to 5
percent.

Additionally, hospitals could receive several million dollars a year for meeting federal
Medicare performance targets, and face penalties for noncompliance.

Sprawling corporate health systems that make the switch will spend hundreds of millions of
dollars in the next several years replacing electronic medical networks at doctors’ offices and
training several thousand physicians and nurses on the new systems. But most doctors, those not
affiliated with giant health networks, will be shopping on their own for electronic systems. They
will bill fewer patients and work longer hours for several months until they attain competence.

Even among existing systems, not all are fully interconnected with each other, requiring
receptionists to make phone calls to order lab work, or to fax in prescriptions.

“Overall, it’s better than using paper records, but I don’t think anyone is 100 percent happy
with it,” said Terry Brenneman, a pediatrician in Raleigh, N.C.

The shift, however, is inevitable and embraced by a growing cadre of doctors, who swear by the
technology and say patients receive better care from programs that flag dangerous drug
interactions, send prompts and reminders, sort patient data and plot charts into meaningful
patterns.

“It’s in your face for safety,” said Charles Cooperberg, a Durham, N.C., nephrologist who uses a
program called Allscripts Professional and whose 12-person practice netted $18,000 per doctor in
federal incentives in 2011. “Multiple people can have the chart up at the same time. It doesn’t
really matter. Everything’s everywhere.”

Talbert is dreading the change he’ll have to make. He said his practice had to cut its workload
in half to learn how to use the MyWay system sold by Allscripts.

When Allscripts said on Oct. 5 that it will discontinue MyWay, competitor Aprima announced that
Allscripts was “abandoning” its customers. Texas-based Aprima has since retracted that
characterization but says in its statements that it is “rescuing” MyWay users. Aprima has offered
to give MyWay doctors an $8,500 software license for free for switching to Aprima’s electronic
medical-records system.

Allscripts is offering to upgrade Talbert and other doctors from MyWay to the Allscripts
Professional software program at no extra cost. “Ease of use was really critical to our decision
here,” Allscripts President Lee Shapiro said of the MyWay phase-out.

About 180,000 doctors use its electronic records software, about a third of the nation’s
practicing physicians, Shapiro said.

Cooperberg, the kidney specialist, said computerized patient records are essential in his
specialty, where patients sometimes use a dozen drugs and have multiple illnesses that must be
monitored carefully.

“No one could read my writing — I couldn’t read my own writing,” Cooperberg said of his scrawled
prescriptions, a common complaint in the medical profession. “I could never go back to paper.”